For many years now the legal system in the uk has been funded in a number of ways. For smaller cases such as small claims court the parties will not usually require legal representation and therefore costs are not an issue, beyond those of the individual parties involved. For normal court proceedings solicitors are usually involved and sometimes also barristers so the costs can begin to spiral, this is when a costs award is usually made for the winning party, so the losing one will often have to pay all their costs. Of course for many people legal aid is an option so they may be able to get their entire costs covered anyway.
The no win fee cases which are becoming more common these days are a similar case, in that the solicitor will generally be quite selective about which cases they will take on, then when the case is won they claim their fees from the other party. They need to be selective in this way because they generally guarantee that there are no fees involved for their client, so if they do happen to lose the solicitors have to absorb them themselves. The positive aspect of this is that if you have a strong case you have absolutely no outlay regardless of the verdict, however on the other hand, if you have a case which is more unclear what the verdict will be, they may not take you on as a client at all, or if they do you may not qualify for the free service, on the understanding that you could have to ultimately pay two sets of costs.
There are numerous companies who provide a middle man service around the no win no fee cases, they attract interest through various advertising mediums, then qualify each inquiry before selling them on to the solicitors who actually manage the individual cases. The changes to funding are an attempt to prevent this kind of company from inflating the overall costs and effectively cut margins down to the point that nobody would pay for their leads any more.
So what’s being proposed? Well, at the moment a solicitors fees build up according to the time spent on the case, however the proposed changes will bring in a fixed fee instead, whilst this is not yet set, it’s likely to be much less than they currently charge for many cases, particularly the more lengthy ones. To keep up to date with how these changes proceed, see the law society website.